Panama: A Tax Haven Or Platform For International Services And For Doing Businesses?

Colombia´s Decree

Decree # 1966 of 2014.
The President of the Republic of Colombia considers:
That as part of harmful tax competition between jurisdictions, tax
havens offer attractive tax advantages for capital, financial
activities of non-residents and other activities susceptible to
geographical mobility, by means of a lax legislation and controls
with little or no transparency in relation to services provided to
third countries, with inexistent or nominally low tax rates
compared to those applicable to similar operations in Colombia; the
existence of laws or administrative practices that restrict sharing
of information; the lack of transparency at legal or regulatory
level or in administrative functions; the no demand of a
substantive local presence or real activity of economic substance;
all of which can cause distortions in both, investment and
commercial decisions, and because of its effect erode the tax base
of the Colombian State.

President Santos- Statement

The president of Colombia, Juan Manuel Santos, stated that the
measures taken by his government, to declare Panama a "tax
haven" is not "a decision against" the Central
American country, but a measure to prosecute tax evaders.
Colombia, he added, has to implement a policy that includes these
type of measures because Colombia wants to be recognized as "a
serious country which fights tax evasion."
This policy is part of the Colombian commitments in order to join
the Organization for Economic Cooperation and Development
(OECD).

OECD Organization for Economic Cooperation and Development

Comprised by 34 countries.

What is it?

The Economist magazine calls it a "Rich Countries
Club" and Paul Krugman sees it as a Think Tank. I identify as
a CARTEL.

The Cartel

It seeks to eliminate competition of countries like Panama, to
their financial centers.
So they confessed:
In paragraph 36 of "Improving Access to Bank Information"
says the OECD:
"The liberalization (of financial markets) was a response to
the threat to the financial markets by "Offshore"
financial centers". These centers, in the 60s and 70s decades,
managed to attract foreign financial institutions offering banking
systems with minimal regulation and low taxes ... at a time when
technological advances made them of easy access... "

Note: Pascal forgot the existence of the U.S.A. and the fact
that it is the world's largest financial center.

The most important note of the report

"Paradoxically, the United States, which set the ball
rolling with FATCA, does not want to sign up to the new OECD
standard, which would require full reciprocity between countries,
preferring to stick to its own law instead."
This was not even mentioned in the local journalist extensive
report
Source: Tax Summit in Berlin aims to say goodbye to banking
secrecy

Through the administrative act 2014-62 US Federal
Government indicates with which countries it has obligations to
exchange information and with which ones on the list they actually
exchange

Países con los que tiene
obligación

Antigua & Barbado

Aruba

Australia

Austria

Azerbaijan

Bangladesh

Barbados

Belgica

Bermuda

Brazil

British Virgin Islands

Bulgaria

Canada

Cayman Islands

China

Colombia

Costa Rica

Croatia

Curazao

Cipré

República Checa

Dinamarca

Dominica

República Dominicana

Egipto

Estonia

Finlandia

Francia

Alemania

Gibraltar

Grecia

Grenada

Guernsey

Guyana

Honduras

Hong Kong

Hungria

Iceland

India

Indonesia

Irlanda

Isle of Man

Israel

Italia

Jamaica

Japón

Jersey

Kazakhastan

Korea del Sur

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Marshall Islands

Mauritius

Mexico

Monaco

Morocco

Netherlands

Netherlands

Netherlands ilsand territories
(Bonaire, Saba, and St. Eustatius)

New Zealand

Noruega

Pakistan

Panama

Perú

Philippines

Polonia

Portugal

Romania

Russian federation

República Eslovaca

Slovenia

Sur África

España

Sri Lanka

St. Maarten (Dutch Part)

Sweden

Switzerland

Tailandia

Trinidad y Tobago

Tunisia

Turquia

Ucrania

Reino unido

Venezuela

Australia

Canadá

Dinamarca

Finlandia

Francia

Alemania

Guernesey

Irlanda

Isle of Man

Italia

Jersey

Malta

Mauritius

México

Netherlands

Noruega

España

Reino Unido

Countries the USA gives information:

Australia

Canadá

Dinamarca

Finlandia

Francia

Alemania

Guernesey

Irlanda

Isle of Man

Italia

Jersey

Malta

Mauritius

México

Netherlands

Noruega

España

Reino Unido

We are no Tax Haven
Panama has none of the factors Colombia identifies as tax
haven.
1. Our tax law contains no law that gives special treatment for
investments in Panama, to foreigners or to foreign investors, in
general. Tax law is equal for all domestic and foreigners, whether
or not residents. Example: Interest on bank deposits. Both
nationals and foreigners are exempted. On the other hand, U.S.
nonresident aliens are exempted, not so Americans or residents who
do have to pay taxes. This is, clearly, a law to attract foreign
investment.
2. We do not have "lax" controls. Our tax laws are
transparent; there are no powers to negotiate fiscal agreements on
taxes and our banking center is acknowledged as one of the
strictest in the world. Our Banking system has the distinction of
having survived unharmed the severe crisis during the Noriega's
period when banks were closed for several months (no depositor lost
neither principal nor interest when the system was reinstated). We
also passed without damage the banking crisis that began in 2008
when many banks in OECD countries went bankrupt caused, precisely,
by "lax" controls on subprime mortgages.

3. Our income tax is at the same level, and sometimes higher
than some OECD States (example: tax on corporations in England 21%
vs 25% in Panama; individuals who earn up to 11k pay no taxes;
above 50k pay 15% and then up to 25%. We pay property taxes. Sales
and service taxes range between 7%-10%.

4. It is untrue to say that foreign enterprises do not have
substantial presence in Panama. Some of the most important
Colombian companies (banks, cement factories, etc., and more than
106 regional headquarters of multinational companies operate in
Panama, some very important. We also have our banking center, (no
letterbox banks), the Colon Free Zone, ports, and the Panama
Pacific Area where huge global companies like Caterpillar
operate.

5. Panama has signed assistance agreements with many countries,
including fiscal matters. We are founding members of the United
Nations; we belong to the WTO and other authentic international
organizations.

6. Our stock corporation system is acknowledged for its public
registry and for the obligation of the registered agent (who must
be an attorney) to document the identity of their clients. History
shows that whoever uses a Panamanian corporation to commit a crime
is identified. No one gets away. Such are the cases of presidents
of Nicaragua and Costa Rica; the Peruvian, Montesinos and the
Colombian, Murcia. This does not happen in England or in the United
States where since 2008 they have been trying to pass the law to
"know the client" but because of the opposition of some
States (Delaware, Nevada and Wyoming, mainly), which are in the
business of selling companies.

What is Panama?
It is a platform of services and international businesses built on
three pillars:
1. Geographical Position

Panama Canal

Ports

Internet connectivity with five
optical cables

COPA Air Hub

Free of natural disasters
(hurricanes, earthquakes, etc.)

2. Legal and financial system

The Dollar as currency

Territorial Tax System

No central bank

Well-regulated banking center

Registration of ships and
registration of companies, both transparent

Consular representation in major
world ports

Colon Free Zone

Law or Multinational
Headquarters

Panama Pacific Area

City of Knowledge

3. Panamanian society and its people

A friendly country with no tradition
of civil wars; without discrimination of any kind, (race, sex or
religion, nationality)

Excellent schools and health
centers

Conclusions

1. Panama does not have, according to our laws, none of the
characteristics that defines a tax haven.
2. The aggression received by including us in a list of tax havens
with the consequences that entails, had the positive effect of
uniting Panama to defend its platform of services and international
businesses that account for 82% of its economy, and therefore is a
matter of national security.
3. Also, and very important, that before the threats we can apply
our law of retaliation which would affect enterprises that
participate in options for important infrastructure projects; that
uses our platform of services and international business in Panama
as well as our own local economy.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

The United Arab Emirates, a popular tax haven, will succumb to its first direct tax- the value added tax. The New Year will ring in a VAT in the UAE at a moderate rate of 5% (worldwide VAT levels range from 0% to 25%).

A proposed law has been presented which will be amending the rules for determining tax residency of individuals in Cyprus.

Some comments from our readers…“The articles are extremely timely and highly applicable”“I often find critical information not available elsewhere”“As in-house counsel, Mondaq’s service is of great value”

This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).

Email Address

Company Name

Password

Confirm Password

Position

Mondaq Topics -- Select your Interests

Accounting

Anti-trust

Commercial

Compliance

Consumer

Criminal

Employment

Energy

Environment

Family

Finance

Government

Healthcare

Immigration

Insolvency

Insurance

International

IP

Law Performance

Law Practice

Litigation

Media & IT

Privacy

Real Estate

Strategy

Tax

Technology

Transport

Wealth Mgt

Regions

Africa

Asia

Asia Pacific

Australasia

Canada

Caribbean

Europe

European Union

Latin America

Middle East

U.K.

United States

Worldwide Updates

Check to state you have read and agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you
are granted a non-exclusive, revocable license to access the Website under its
terms and conditions of use. Your use of the Website constitutes your agreement
to the following terms and conditions of use. Mondaq Ltd may terminate your use
of the Website if you are in breach of these terms and conditions or if Mondaq
Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to
read the full text of the content and articles available (the Content). You may
not modify, publish, transmit, transfer or sell, reproduce, create derivative
works from, distribute, perform, link, display, or in any way exploit any of the
Content, in whole or in part, except as expressly permitted in these terms &
conditions or with the prior written consent of Mondaq Ltd. You may not use
electronic or other means to extract details or information about Mondaq.com’s
content, users or contributors in order to offer them any services or products
which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the
suitability of the information contained in the documents and related graphics
published on this server for any purpose. All such documents and related
graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or
its respective suppliers hereby disclaim all warranties and conditions with
regard to this information, including all implied warranties and conditions of
merchantability, fitness for a particular purpose, title and non-infringement.
In no event shall Mondaq Ltd and/or its respective suppliers be liable for any
special, indirect or consequential damages or any damages whatsoever resulting
from loss of use, data or profits, whether in an action of contract, negligence
or other tortious action, arising out of or in connection with the use or
performance of information available from this server.

The documents and related graphics published on this server could include
technical inaccuracies or typographical errors. Changes are periodically added
to the information herein. Mondaq Ltd and/or its respective suppliers may make
improvements and/or changes in the product(s) and/or the program(s) described
herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally
identifies you, including what sort of information you are interested in, for
three primary purposes:

To allow you to personalize the Mondaq websites you are visiting.

To enable features such as password reminder, newsletter alerts, email a
colleague, and linking from Mondaq (and its affiliate sites) to your website.

Mondaq (and its affiliate sites) do not sell or provide your details to third
parties other than information providers. The reason we provide our information
providers with this information is so that they can measure the response their
articles are receiving and provide you with information about their products and
services.

If you do not want us to provide your name and email address you may opt out
by clicking here .

If you do not wish to receive any future announcements of products and
services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to
view the free information on the site. We also collect information from our
users at several different points on the websites: this is so that we can
customise the sites according to individual usage, provide 'session-aware'
functionality, and ensure that content is acquired and developed appropriately.
This gives us an overall picture of our user profiles, which in turn shows to
our Editorial Contributors the type of person they are reaching by posting
articles on Mondaq (and its affiliate sites) – meaning more free content for
registered users.

We are only able to provide the material on the Mondaq (and its affiliate
sites) site free to site visitors because we can pass on information about the
pages that users are viewing and the personal information users provide to us
(e.g. email addresses) to reputable contributing firms such as law firms who
author those pages. We do not sell or rent information to anyone else other than
the authors of those pages, who may change from time to time. Should you wish us
not to disclose your details to any of these parties, please tick the box above
or tick the box marked "Opt out of Registration Information Disclosure" on the
Your Profile page. We and our author organisations may only contact you via
email or other means if you allow us to do so. Users can opt out of contact when
they register on the site, or send an email to unsubscribe@mondaq.com with “no
disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate
registration form. This is a personalised service where users choose regions and
topics of interest and we send it only to those users who have requested it.
Users can stop receiving these Alerts by going to the Mondaq News Alerts page
and deselecting all interest areas. In the same way users can amend their
personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an
identifying user number. The cookies do not contain any personal information
about users. We use the cookie so users do not have to log in every time they
use the service and the cookie will automatically expire if you do not visit the
Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to
personalise a user's experience of the site (for example to show information
specific to a user's region). As the Mondaq sites are fully personalised and
cookies are essential to its core technology the site will function
unpredictably with browsers that do not support cookies - or where cookies are
disabled (in these circumstances we advise you to attempt to locate the
information you require elsewhere on the web). However if you are concerned
about the presence of a Mondaq cookie on your machine you can also choose to
expire the cookie immediately (remove it) by selecting the 'Log Off' menu option
as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example,
advertisers). However, we have no access to or control over these cookies and we
are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement,
and gather broad demographic information for aggregate use. IP addresses are not
linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or
its affiliate sites) are not responsible for the privacy practices of such other
sites. We encourage our users to be aware when they leave our site and to read
the privacy statements of these third party sites. This privacy statement
applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or
contests. Participation in these surveys or contests is completely voluntary and
the user therefore has a choice whether or not to disclose any information
requested. Information requested may include contact information (such as name
and delivery address), and demographic information (such as postcode, age
level). Contact information will be used to notify the winners and award prizes.
Survey information will be used for purposes of monitoring or improving the
functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our
site, we ask them for the friend’s name and email address. Mondaq stores this
information and may contact the friend to invite them to register with Mondaq,
but they will not be contacted more than once. The friend may contact Mondaq to
request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’
information. When users submit sensitive information via the website, your
information is protected using firewalls and other security technology. If you
have any questions about the security at our website, you can send an email to
webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode),
or if a user no longer desires our service, we will endeavour to provide a way
to correct, update or remove that user’s personal data provided to us. This can
usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will
post those changes on our site so our users are always aware of what information
we collect, how we use it, and under what circumstances, if any, we disclose it.
If at any point we decide to use personally identifiable information in a manner
different from that stated at the time it was collected, we will notify users by
way of an email. Users will have a choice as to whether or not we use their
information in this different manner. We will use information in accordance with
the privacy policy under which the information was collected.

How to contact Mondaq

If for some reason you believe Mondaq Ltd. has not adhered to these
principles, please notify us by e-mail at problems@mondaq.com and we will use
commercially reasonable efforts to determine and correct the problem promptly.